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On May 5, a 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe sold for $142 million at auction at the Mercedes-Benz Museum in Stuttgart, Germany. It was the highest price ever paid for a car at auction, well beating the eight-figure Ferrari sales that had long topped prime billing.

The identity remains a mystery of who purchased one of two silver stunners with gullwing doors and shiny exhaust pipes protruding from its right side. Despite persistent industry rumors, representatives of Ernesto Bertarelli, a Swiss-Italian billionaire, strongly denied to Bloomberg that the longtime Mercedes-Benz connoisseur made the happy offer.

“The buyer is above all an enthusiast, and not an investor,” says Simon Kidston, who won the auction on behalf of a client he refuses to identify. “It’s someone who love the car. The buyer never asked me what I think the car might be worth in the future.

What is certain is that an object of such value will require an ironclad insurance policy, if the new owner plans to drive it. Technically, if the car is never driven, it won’t legally need insurance, say analysts at Hagerty, a company that provides insurance for collector vehicles and collections worth up to $1 billion. of dollars.

“In some parts of the world, people don’t insure high-value vehicles,” says Jack Butcher, president of global markets at Hagerty. “They want to keep them off the books.”

Like a work of art

A Mercedes-Benz spokesperson said the company would not comment on insurance regarding the record-breaking coupe. But according to Abe Barnett, vice president of Signature Services, Hagerty’s most high-end insurance segment, the most obvious bet for the new owner would be to protect it under an inland marine insurance policy. , which covers high-value items typically excluded from proper coverage. .

Many factors go into finalizing the pricing and structure of such a policy – things like location, storage and type of vehicle – but in general, insuring a $100 million vehicle costs a lot more. $100,000 to be insured each year.

“It would basically treat it like jewelry or art,” says Barnett. “It offers a much broader form of coverage, as opposed to a standard car insurance policy, which would be comprehensive and collision coverage. When they take their vehicle, whether they want to take it to a contest or the take it on a road rally or tour, this policy will cover it appropriately.

Galleries and art fairs often use this form of coverage to protect paintings, sculptures, prints, collections, and cultural artifacts, and elite garages do so with cars. This includes protection against damage or loss due to theft, accident or mishandling, or in the event of undetermined cause of the disappearance of goods. It would also help cover the cost of repairing or replacing property damaged by fire, wind, hail or water.

Home Navy policies do not, however, cover war, nuclear or other damages. They do not cover mechanical breakdowns or issues that arise from regular use, such as tire punctures, hose repairs or brake replacements. If you (or, more likely, your mechanic) forget to change the oil in your multimillion-dollar Mercedes, it’s your responsibility. Annual maintenance of these vehicles can cost tens of thousands of dollars in storage, fuel, parts and service.

“It’s customary for insurers not to try to insure what they consider normal wear and tear,” Butcher says.

How much is it worth… to you?

The most important thing when taking out such a policy is to agree on the value for which the vehicle will be insured. This number may be much higher than what was paid for it; it can also increase when a car is restored. Kidston declined to discuss details of the value for which his client’s vehicle would be insured.

Preserving or restoring a single million dollar vehicle can increase its value significantly, although this was not the case with the Uhlenhaut Coupe.

“As the car has always been a jewel of the Mercedes-Benz museum, it has always been meticulously maintained in exceptional condition,” says Haynes. “There really wasn’t any work to be done on the car before it was offered for sale, as far as we know.”

For vehicles that need work, the insurance provider will often check in with high net worth owners on a quarterly basis to determine the progress of the project and adjust the value of the insurance policy accordingly.

keep safe

How and where the car will be stored will likely affect the price of the insurance policy more than anything else. “Many wealthy people live in beautiful areas that tend to be catastrophically exposed,” Butcher says, citing private islands, forested mountains and steep cliffs.

It is essential to keep a vehicle away from wildfire areas and hurricane areas. The same goes for storage in a temperature-controlled environment with effective security cameras, burglar alarms, and sprinkler systems that can spray fire-retardant foam. Some collectors go so far as to preemptively clear brush within a 200-foot radius of where they store the car and dig retention ponds to dampen the flames if a fire approaches — all to protect the investment.

An additional consideration: “Insurers will want to know the ages of people who might drive it,” says Kidston. “And if the car is transported, they will often ask that there are two drivers in the truck and that it not be left unattended for a period of time. Transportation typically costs $2,000 to $10,000 or more, depending on whether the vehicle is transported via flatbed truck, covered carrier, ship, or cargo plane.

A deductible generally does not apply in the case of ultra-rare cars. If an owner insists on having one, it could be 1%, 5% or 10% of the car’s total insured value, Butcher says. Having a deductible is a way to avoid having to submit an insurance claim for smaller incidents such as knocks or cracked wheels.

“If someone feels comfortable absorbing the cost, they may want to fix it themselves,” Barnett says. “They might say, ‘Well, it’s $50,000 or $100,000. I’m comfortable paying for this out of pocket.

As with your everyday car insurance policy, not having to submit a claim helps keep the insurance premium as low as possible. “It’s not a crazy amount, but it does reduce it enough,” Barnett says. (A single claim on a policy probably wouldn’t raise rates.) Ethically, anyone selling a vehicle should disclose even small incidents that have happened to them, whether or not the incident was reported to insurance. .

Rise from the ashes

Even if the unthinkable happens and the car is damaged in a catastrophic event like a plane crash or a flood, not all will necessarily be lost, assuming it can be repaired.

“Of course nobody likes that in a car’s history, but at least the car isn’t completely written off,” says Kidston. In the event of extreme damage, the owner turned to the insurance company to reduce the value of the car, pending its restoration.

In rare cases, the value of cars has skyrocketed after superficial damage. In 2019 in Durham, North Carolina, a gas line exploded outside a warehouse storing about half of Ingram’s prestigious car collection. An Extremely Rare 1961 Porsche 356 B Carrera GTL Abarth So Valuable An Original Toolbox Is Worth It $10,000— was one of several vehicles injured when the roof collapsed.

After an intensive 4,000 hour restoration of the tiny silver race car by the family business called Road Scholars, the Abarth made a full comeback in just four months, winner its class at the Pebble Beach Concours d’Elegance. She then won top honors in her class at the 2022 Amelia Island Concours d’Elegance. In May, she won her class at the Villa D’Este Concours d’Elegance.

Call it a triple crowned comeback and more, with the help of a solid insurance policy.

Photograph: A vintage Mercedes-Benz 300 SL Coupe W198 (1955) during the Mille Miglia classic car race on May 17, 2014 in Colle di Val d’Elsa, Tuscany, Italy. Photo credit: Bigstock

Copyright 2022 Bloomberg.


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